The newly issued shares get sold by the company and the company gets that money for their investment/operations/whatever purposes.

So the new shareholders pay "into the pie" and the pie gets bigger, and the effect is that the old shareholders have a slightly smaller share of a slightly larger pie which, if the new shares were sold exactly at the market price, theoretically should have the exact same value - and in practice, assuming the decision to raise capital and invest is useful, usually results in a larger value.

The board can authorize issuing new shares up to the limit defined by the corporate charter (giving them the ability to raise capital as in this case). Issuing more shares beyond that or beyond the limits defined by the exchange rules go up to a shareholder vote. Shareholders can also sue to block things if there's shady stuff going on. Current shareholders aren't "made whole" there are just more shares and they now own less of the company.

Their shares are worth more as a result. Oracle's corporate charter has some provision for the number of shares they're allowed to issue and existing shareholders bought their shares knowing that. Increasing the authorized share limit requires shareholder vote.